A Grocer’s Guide to the COVID-19 Environment
The resurgence of COVID-19 infections across the United States in recent months has ushered in a series of familiar challenges for the food retail industry. It wasn’t too long ago that bare shelves, shopping carts filled with toilet paper and long lines across supermarket parking lots made national news headlines — all early ripple effects of the pandemic that caught grocers completely by surprise. In the eight months since, we’ve seen some companies take proactive steps toward creating opportunities out of the pandemic’s most complex challenges. Advanced technology has emerged as a guiding light for the U.S. food distribution channel. It has helped grocers and supermarkets optimize inventory management by linking execution with planning through advanced data, and by building resilient supply chains with real-time actionability to optimize the outcomes.
However, the marathon is far from over. The 2020 holiday season coupled with widespread rising cases and new lockdown restrictions have marked the return of consumer stockpiling. As the outlook for 2021 remains uncertain, it’s a vital time for grocers to equip themselves with the necessary tools to navigate a rapidly evolving environment and cater better to their increasing consumer demand expectations.
Secure E-Commerce Stability
One of the food retail sectors’ first notable COVID-19 trends was the rapid increase in e-commerce demand. From March to May, online grocery sales grew by 90% while food delivery sales doubled. The dramatic shift to digital will only continue to rise — Bank of America Analysts project online grocery to generate $705 billion by 2025. Extensive e-commerce options like click and collect, buy online pickup in store (BOPIS) and curbside pick-up are now widely considered necessities. Any grocers that aren’t already offering these options will need to pivot quickly.
However, a retailer’s e-commerce strategy is only as strong as its platform and people. Investing in an efficient omnichannel platform and additional labor to ensure efficient online fulfillment must be a fundamental focus into the new year. Adapting traditional business models will also be important; despite the skyrocketing e-commerce sales, food retail profit margins are still taking a hit due to outdated financial structures that don’t align with a pandemic environment. Micro-fulfillment centers that leverage automated intelligence and machine learning are a smart, cost-effective option. They enable retailers to utilize existing stores to increase their e-commerce efficiency and offer same-day home delivery.
Strengthen Supply Chains for Stockpiling
Consumer stockpiling led to bare grocery shelves during the 2020 holiday season. Based on that, we’ll likely see additional sudden surges in demand this year due to more stockpiling. Combating the volatility caused by it is a much more difficult task for food retailers in comparison to other industries, considering a majority of their products are perishable. Overstocking isn’t an option like it is in fashion. The risks (lost sales sustainability) are much higher for grocers.
To combat this challenge, grocers are focused on top-selling items and CPG products that won’t end up as excess and have longer shelf-lives. With the combined use of innovative technologies like blockchain, RFID and prescriptive analytics, food retailers will optimize their supply chains to handle rapidly fluctuating demand waves both during and after the pandemic. Supply chain challenges are unavoidable, but instead of searching for quick fixes with a “band-aids and bubblegum” approach, where deficiencies and gaps go unnoticed, grocers should lean on advanced technology for accurate forecasting and end-to-end visibility that produces actionable insights. Collaborating with vendors and suppliers to share advanced analytics data will help avoid disruptions and bottlenecks. Focussing on the must-have products and building the right resiliency for them helps with prioritization as well as vendor relationships. Sometimes it is easier to request the resiliency and risk to be taken on by the vendor rather than the banner.
Streamline Safe and Seamless Customer Experiences
Autonomous labor solutions are an effective resource grocers can leverage for managing inventory, maintaining COVID-19 safety protocols and fostering personalized customer experiences. A simplified buyer’s journey is especially important as the state of the pandemic worsens. Customers need quick and easy shopping trips that limit their time spent in public settings. This heightens the need for optimized store layouts and shelf placements that allow shoppers to easily find the items on their list.
By utilizing artificial intelligence (AI), machine learning (ML) and advanced analytics systems, grocers accurately track inventory levels, sudden demand swings and new purchasing habits that dictate the best possible alignments — thus increasing sales, margins and, more importantly, customer satisfaction. Grocers should also use technology to improve their levels of sanitation and food safety. From contact tracing to monitoring sanitation schedules to flagging expired products for employees to dispose, an advanced analytics solution will safeguard the entire store to ensure a safe environment for both customers and employees.
With the right planning and advanced technologies in place, grocers can reimagine COVID-19 as a unique window of opportunity for fostering long-term success. Learn more about how Zebra’s extensive line of grocery solutions can help your company navigate the pandemic.
